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Montana bill to increase minimum wage tabled in committee

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By Keila Szpaller DAILY MONTANAN

Legislators stopped proposals to up the minimum wage to $15 an hour and $12 an hour last session — and then shut down the idea for $10, a compromise, said Rep. Kelly Kortum, D-Bozeman.

This session, Kortum tried again for $11.39 an hour — $10 with a bump for inflation, he said.

Now, that’s dead too.

Tuesday, the House Business and Labor Committee voted 13-7 on party lines to table the bill — with Republicans in opposition.

Last week, the Montana Chamber of Commerce, the Montana Restaurant Association, and Americans for Prosperity told lawmakers the increase was a bad idea.

Tabling the bill leaves the state minimum wage at $9.95 an hour.

“Workers who make a minimum-wage salary in this state are merely hovering above the federal poverty line,” said Amanda Frickle of the Montana AFL-CIO on behalf of 50,000 working Montanans, retirees and families at a hearing last week.

Representatives from the Montana Federation of Public Employees, the Associated Students of the University of Montana, and Big Sky 55+ were also among those who spoke in support of the bill.

Prior to the vote, Rep. Eric Matthews, D-Bozeman, said he had done research on how minimum wage would track since the 1970s or so. He said many different metrics exist, but the range runs from $12 an hour to $24.

“We are below that by a couple bucks,” Matthews said.

The longer Montana postpones an increase, he said, the more its lowest wage workers will fall behind.

At the hearing, an economist with the Montana Department of Labor and Industry estimated the bill would affect 68,700 workers, or 14% of the workforce.

Wyatt LaPraim, with Americans for Prosperity, said the free market was taking care of the matter already — and the Department of Labor economist said wages on the lower end of the scale were increasing faster than those on the higher end.

LaPraim said Big Box outfits will adjust, but raising the minimum wage would hurt small family businesses and also dull motivation.

“Why work harder or smarter when you’ve got a guaranteed minimum wage?” LaPraim said.

Kortum, though, noted the minimum wage isn’t tracking with the cost of living in Montana.

For example, in Ekalaka, where he grew up, the cost of living is $14.98 an hour, and in Bozeman, it’s $16.62 an hour.

So somewhere along the way, those workers earning the minimum of roughly $10 an hour need to scrape together another $5 or so an hour just for the basics, he said.

“It just adds dignity to the life of the folks that are doing this work,” Kortum said.

In other committees, people have testified that workers are living in RVs and churches because they can’t afford homes, childcare workers can’t make ends meet, and direct care providers are hurting.

Frickle, with the AFL-CIO, said some businesses, in accommodation and food service in particular, have been forced to reduce hours or even close shop because of “drastic workforce shortages.” 

“It stands to reason that those workforce shortages exist simply because workers cannot afford to live and work in their communities for a wage that is simply just above the poverty line,” Frickle said.

She also noted voters in 2006 approved a measure that raised the state minimum wage to either $6.15 or the federal minimum, whichever is greater. She said their approval at nearly 73% indicates the popularity and need for the increases.

At the same time, she said legislators adopted a bill last session that precludes local communities from choosing a minimum that’s inconsistent with state or federal laws — leaving the fate of thousands of workers in the hands of the legislature.

“It’s past time for our minimum wage to reflect the true cost of living in Montana,” Frickle said.

Brad Griffin, with the restaurant association, also pointed to the measure approved in 2006, but he said it was an argument against the bill.

Although he said he has a lot of respect for the sponsor and proponents, the minimum wage just went up 70 cents an hour, and thanks to that voter-approved initiative, it would continue to go up by the Consumer Price Index. 

Plus, Griffin said many so-called “minimum wage” workers are servers and bartenders who actually make $20 to $50 an hour with tips.

(He said the Department of Revenue doesn’t include tips in its definition of a wage, but the Department of Labor does. So he said that means the tips are tax free for the worker, who is recorded as a minimum wage earner; but he said the business still has to pay unemployment insurance and worker’s compensation on the tips.)

“I struggle to think of a business that’s paying minimum wage,” Griffin said. “I don’t know who they are.”

Department of Labor economist Amy Watson estimated 8.5% of the 68,700 minimum wage earners are servers, and another 6% are bartenders.

Of those earning at or below $11.39 an hour, Watson said an estimated 64% are women, 56% are 25 years or older and 48% are working full time.

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